Zotye Auto Under CSRC Investigation for Alleged Disclosure Violations

Zotye Auto announced in a public filing that it has received a "Notice of Case Filing" (No. [2026] 01120260029) from the China Securities Regulatory Commission (CSRC), formally initiating an investigation into the company for suspected violations of information disclosure regulations. The announcement did not specify the exact nature of the alleged violations. Previously, in March 2025, the Zhejiang branch of the CSRC had issued a warning letter to the company regarding its delayed disclosure of material information. Specifically, Zotye failed to promptly disclose a RMB 694.611 million overdue debt related to its restructuring, which occurred on December 21, 2025, and only made the disclosure more than one month later—violating timeliness requirements for information disclosure. The company’s then-Chairman, General Manager, and Secretary of the Board were all held accountable for this lapse. The company stated that its vehicle production and operations remain normal and that it will fully cooperate with regulatory authorities during the investigation while fulfilling its statutory information disclosure obligations. Financial data shows that Zotye Auto has reported losses for seven consecutive years from 2019 through 2025, accumulating total losses exceeding RMB 25 billion. In 2025, the company produced only 1,208 vehicles and sold just 14 units. In the first quarter of 2026, Zotye reported revenue of RMB 747.619 million, a year-over-year decline of 24.29%, and a net loss of RMB 820.099 million for the quarter, with a debt-to-asset ratio nearing 99%. Additionally, the company has recently experienced frequent executive changes: On June 20, 2026, Director Xu Mingzhe resigned due to personal work adjustments; on June 30, Vice President Wang Yian also submitted his resignation. On the day the announcement was released, the company’s share price rose by 4.09%, closing at RMB 1.78 per share, with a total market capitalization below RMB 9 billion.